Infrastructure & PPP Knowledge Center
Explore our verified library of Infrastructure & PPP transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
Construction Revenue Recognition (Intangible Asset Model)
Recording revenue and costs during the construction of a public asset where the operator receives the right to charge users (e.g., a Toll Road).
Construction Revenue Recognition (Financial Asset Model)
Recording construction progress for a project where the government guarantees fixed 'Availability Payments' regardless of usage (e.g., a Public School or Hospital).
Capitalization of Interest (Borrowing Costs) during Construction
Capitalizing interest expense on project-specific debt during the construction phase of an infrastructure asset.
Government 'Gap Funding' (Construction Grant)
Recording cash received from the government to subsidize the construction costs of a project that would otherwise be economically unviable.
Transfer of Construction in Progress (CIP) to Operating Phase
Closing the construction account and recognizing the 'In-Service' Intangible Asset as the infrastructure project opens to the public.
Traffic-Based Amortization (Intangible Asset Model)
Amortizing the concession intangible asset using a units-of-production method based on actual traffic volume relative to total projected traffic.
Availability Payment Split (Financial Asset Model)
Allocating a cash payment from the government between service revenue, interest income, and reduction of the financial asset (principal).
Toll Revenue via Prepaid Transponder (EZ-Pass/Tag)
Recording the initial customer top-up and the subsequent revenue recognition when the vehicle passes through the toll gantry.
Shadow Toll Revenue Recognition
Recording revenue where the government (not the driver) pays the operator based on vehicle counts recorded at sensors.
Non-Availability Penalty (Revenue Deduction)
Recording a reduction in revenue due to lane closures or service failures that violate the Concession Agreement.
Major Maintenance Provision (Accrual Phase)
Recognizing a periodic obligation for future heavy maintenance (e.g., road resurfacing) required under the terms of the concession agreement.
Expenditure Against Major Maintenance Provision
Recording the actual cash outflow for heavy maintenance and the utilization of the previously recorded liability.
Hand-back Restoration Obligation (Final Term)
Accruing the specific costs required to bring the asset up to the 'Hand-back' quality standards required for transfer to the government at the end of the concession.
Refinancing Gain Sharing (Liability to Government)
Recording the liability to the government when the operator refinances project debt at a lower rate and is contractually required to share the savings.
End of Concession: Asset Hand-over to Government
Deregistering the intangible/financial asset and settling all related provisions at the end of the concession term.
Upfront Concession Fee (Brownfield Acquisition)
Recording the payment made to the government for the right to operate an existing, already-built asset (e.g., an existing toll bridge or airport).
Minimum Revenue Guarantee (Bifurcated Model)
Accounting for a project where the operator takes traffic risk (Intangible) but the government guarantees a 'floor' payment (Financial Asset).
Concession Modification (Significant Expansion)
Recording a change order where the government requests an additional lane or facility mid-concession in exchange for an extended contract term.
Project Finance 'Waterfall' (Restricted Cash)
Moving operating cash into restricted 'Debt Service Reserve Accounts' (DSRA) as required by lenders.
Impairment of Concession Right (Traffic Shortfall)
Recording a permanent write-down of the Intangible Asset value due to a structural decline in traffic (e.g., a new competing free road or demographic shift).
Pre-concession Bid Costs (Expense vs. Capitalization)
Handling the accounting for legal, engineering, and financial advisory costs incurred during the multi-year bidding process for an infrastructure project.
Force Majeure / Compensation Event Revenue
Recording a 'Make-Whole' payment from the government when an external event (e.g., a pandemic lockdown or a competing road build) triggers a contractual compensation clause.
Sponsor's Equity Investment in Project SPV
Recording the parent company's initial cash investment and the subsequent application of the equity method for a 50% owned project.
Deferred Tax Liability (DTL) on Concession Asset
Accounting for the temporary difference between the book value of the Intangible Asset and its tax basis (often zero for tax purposes).
Termination Payment (Government Default)
Recording the settlement when the government terminates the contract early and is required to pay out the unamortized value of the asset plus a penalty.
Toll Indexation (Inflation-Linked Price Adjustment)
Recording the annual adjustment of toll rates based on the Consumer Price Index (CPI) as permitted by the Concession Agreement.
Secondary Revenue: Fiber Optic & Telecom Leasing
Recording revenue from leasing 'excess capacity' in the infrastructure (e.g., running fiber optic cables through a tunnel or mounting 5G cells on light poles).
Interest Rate Swap (Cash Flow Hedge) for Project Debt
Recording the monthly mark-to-market (MTM) adjustment for a swap used to convert floating-rate project debt into a fixed rate.
Development Fee (Success Fee) at Financial Close
Recording revenue earned by the lead sponsor from the Project SPV upon the successful 'Financial Close' of the project.
Mezzanine Debt with Payment-in-Kind (PIK) Interest
Accounting for high-yield subordinated debt where interest is not paid in cash but 'rolled up' into the principal balance.
Secondary Market Sale (Partial Project Divestment)
Recording the sale of a partial equity stake in a mature infrastructure project to an institutional investor (e.g., a Pension Fund).
Sovereign Risk Insurance (MIGA/OPIC Premiums)
Accounting for insurance premiums paid to protect against political risks, such as expropriation or breach of contract by the government.
Dynamic Congestion Pricing (Variable Tolls)
Recording toll revenue where the price fluctuates in real-time based on traffic density and speed.
Government-Provided Land Right (Non-Cash Grant)
Accounting for the right to use government-owned land for the project at zero or nominal cost.
Deferred Maintenance (Acquisition Accounting)
Recording the liability for immediate 'catch-up' maintenance required when taking over an existing (Brownfield) public asset.
Need a specific Infrastructure & PPP entry?
Our team is constantly updating the hub. If you can't find what you need, suggest a new entry below.
Contact Expert